HALOWS CO.,LTD.
2742・Prime Market・Retail Trade
Business
Hellows Co., Ltd. is a food supermarket chain founded in 1949 and renamed to its current company name in 1988, originating in Fukuyama City, Hiroshima Prefecture. It operates in a trading area spanning seven Setouchi coastal prefectures—Hiroshima, Okayama, Kagawa, Ehime, Tokushima, Hyogo, and Yamaguchi—with 107 stores as of the end of February 2025. Its core business format is an open mall-type NSC (neighborhood shopping center) centered around 24-hour food supermarkets with sales floor areas of either 600 tsubo or 450 tsubo, with new stores opened based on a trading area population benchmark of 30,000 people in suburban and urban residential areas. The company handles a wide range of products centered on fresh foods such as fruits and vegetables, fresh fish, prepared foods, and meat, alongside daily necessities, general food items, confectionery, alcoholic beverages, and sundries, with its core business philosophy being to support the daily food needs of local residents 365 days a year. Listed on the Prime Market of the Tokyo Stock Exchange.
Business Model
By concentrating store openings within specific regions (dominant area strategy), the company enhances logistics and advertising efficiency while maximizing sales floor utilization through a 24-hour total operation system. Its proprietary logistics network centered on the Hayashima Logistics Center, combined with an automated ordering system, ensures stable product supply and low-cost operations. While managing cost of sales, which accounts for approximately 74.3% of net sales, the company builds up earnings on an operating revenue basis that also includes other operating income such as rental income (¥6,361 million in FY2026 (ending February 2026)).
Company Strengths
Sales grew for five consecutive periods, from ¥159,147 million in FY2022 (ending February 2022) to ¥219,357 million in FY2026 (ending February 2026). Operating profit also expanded from ¥8,688 million to ¥12,473 million over the same period. Against a target ROE of 10% or higher, the company achieved 13.5% in FY2025 (ending February 2025), and its equity ratio of 62.2% also reflects strong financial soundness.
The company began 24-hour operations in 1994 and established standardized store formats of approximately 600-tsubo and 450-tsubo. Dominant-area store openings have improved logistics and operational efficiency, with per-㎡ sales for the period reaching ¥1,005 thousand (up 5.5% year on year) and per-employee sales for the period reaching ¥32,801 thousand (up 3.1% year on year) in FY2025 (ending February 2025), reflecting improved productivity.
Same-store sales year-on-year ratio remained at a high level of 105.9% in FY2025 (ending February 2025). Even amid rising prices, the company achieved both increased customer traffic and higher selling prices, with total fresh food sales reaching ¥89,822 million (up 9.0% year on year) and sales growth achieved across all product categories. The interest coverage ratio of 189.8x also indicates ample financial capacity.
ENVALITH's Perspective
Performance Trend
Revenue achieved five consecutive periods of growth, rising from ¥159,147 million in FY2022 to ¥219,357 million in FY2026. In the first quarter of FY2027 (ending February 2027) as well, operating revenue remained on a growth trend at ¥57,876 million (up 7.2% year on year). On the profit side, however, an increase in salaries and bonuses (up 11.6% year on year, ¥5,539 million) resulting from the base pay increase implemented in April 2026 (applicable to regular employees and contract employees), combined with an increase in depreciation expenses (up 18.7% year on year, ¥1,351 million) associated with new store openings and renovation investments, caused operating profit to decline to ¥2,728 million (down 10.5% year on year) and quarterly net profit to fall to ¥1,977 million (down 7.2% year on year), marking a shift to lower profits. In terms of the external environment, heightened consumer defensive spending awareness amid elevated prices has been supporting existing-store sales, but absorbing the cost increases remains an immediate challenge. The full-year operating profit forecast of ¥12,590 million (up 0.9% year on year) has been left unchanged, premised on a recovery from the second quarter onward.
Growth Strategy
Under the "Setouchi 2814 Plan," the company aims to achieve 140 stores and ¥280.0 billion in operating revenue by FY2030 (ending February 2030)
In Q1 FY2027 (ending February 2027), the company opened a new store, Jike, in Higashihiroshima City, Hiroshima Prefecture (approximately 600-tsubo sales floor, 24-hour operation), bringing the total store count to 114. The company will continue its dominant store strategy across the seven Setouchi prefectures, targeting 140 stores by FY2030 (ending February 2030).
In Q1 FY2027 (ending February 2027), the company renovated three stores—Takamatsu Kasuga, Tode, and Saijo Iioka—to improve the shopping environment. The expansion of the automated ordering system is improving order accuracy and inventory efficiency amid a labor shortage environment, aiming to enhance productivity.
Through continued development of private brand (PB) products based on the core concept of appropriate quality at low prices, the company is simultaneously improving gross margin and responding to consumers' preference for low prices. This serves as a differentiating factor in a market environment where cost-conscious sentiment is rising.
The company continues preferential shopping benefits for Haroka and Haropuri members, maintaining and enhancing customer loyalty and visit frequency. Expansion of the membership base strengthens the structure supporting stable growth in existing store sales.
In April 2026, the company implemented base wage increases for full-time and contract employees in consideration of the inflationary environment. In the short term, this will pressure profits through increased personnel expenses (salaries and bonuses: up 11.6% year on year), but it aims to strengthen the sustainable store operation foundation through securing human resources and supporting employees' livelihoods.
Last updated: July 17, 2026